Dishwasher is regularly recirculating dirty, greasy water before rinsing. In order to save water, it just cycles the water with all the dirt through the dishes again, many times over. And only then rinses with a pure one.
Most people prefer ignorance to seeing their flatware get sprayed with filthy water. They'd say "eww that's disgusting" and hand wash everything from now on.
It's because of this recirculation that dishwashers consume significantly less water than hand washing.
But people use same water when handwashing too. One sinkful of soapy water first where you wash them, then a sinkful of clean water for rinsing and put them in the drying rack to dry. I believe the significantly is a debatable.
Modern dishwashers have to use less than 5 gallons of water for a normal load. To get the Energy Star rating, that has to be 3 gallons.
A typical two-basin, 33 inch kitchen sink, each basin measures 16in x 14in. Each inch of depth in each basin is approximately 1 gallon. To fill up both basins to a depth of 5 inches, that would take 9.6 gallons, more than 3x more than an Energy Star dishwasher.